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Can financial and economic means accelerate renewable energy growth in the climate change era? The case of China

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  • Taghizadeh-Hesary, Farhad
  • Dong, Kangyin
  • Zhao, Congyu
  • Phoumin, Han

Abstract

In the context of climate change, innovative financing solutions and the rapid development of financial technology (fintech) offer great potential for the growth of renewable energy. Based on panel data from 30 provinces in China, this paper explores the impact of fintech on renewable energy growth by employing the instrumental variable-generalized method of moments (IV-GMM). We also pay attention to the nexus between fintech and renewable energy growth at different quantiles. This paper also explores the moderating role of the digital economy and the mediating role of green technological innovation. The main results indicate that (1) fintech positively affects renewable energy growth in China; (2) the positive effect between fintech and renewable energy is stronger in provinces with lower levels of renewable energy growth; (3) the digital economy, on the one hand, can significantly accelerate renewable energy growth; on the other hand, under the help of the digital economy, fintech can play a more effective role in increasing renewable energy growth; and (4) fintech indirectly promotes renewable energy growth by increasing the level of green technology innovation. The findings provide meaningful references for governments and policymakers and encourage the accelerated adoption of fintech in the sustainable energy sectors.

Suggested Citation

  • Taghizadeh-Hesary, Farhad & Dong, Kangyin & Zhao, Congyu & Phoumin, Han, 2023. "Can financial and economic means accelerate renewable energy growth in the climate change era? The case of China," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 730-743.
    • Handle: RePEc:eee:ecanpo:v:78:y:2023:i:c:p:730-743
    DOI: 10.1016/j.eap.2023.04.013
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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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